Strong economic growth, rising disposable income levels, and a growing population have led to the Indian real estate market to expand histrionically in recent years. Furthermore, the Indian real estate market is very appealing due to high returns and a long-term investment outlook.
These factors have enabled the Indian real estate market to gain traction among investors in India and abroad.
The growing real estate market has captured the interest of NRI based in the Gulf Cooperation Council (GCC). Despite the pandemic and its aftermath, NRIs invested over $13.4 billion in the Indian real estate market in FY21 as compared to 6.4 percent in FY20. With the rupee weakening against the dirham, NRIs from the UAE and the Gulf Cooperation Council countries are reinvesting in Indian real estate.
NRIs in the Middle East are becoming more optimistic about the Indian market, owing to its outperformance of competitors in many countries, including developed ones.
“When it comes to NRI investments in Indian real estate, the Gulf Cooperation Council (GCC) remains a key one. Investments from the GCC as a whole account for close to 41 percent of the global contribution. In the last two years, we’ve seen an increase in the number of NRIs looking to buy a home in India, and pent-up demand has begun to emerge. Factors like a simplified taxation regime and indexation benefit for properties held in India encourage NRI buyers to park their surplus money in India. Other major decision drivers are factors like lower home loan interest, favorable currency movement, digitization of procedures, and transparent regulations”
The Government of India has also launched numerous initiatives to make it easier for non-resident Indians (NRIs) to purchase property in India. For instance, the government has simplified the process of obtaining a real estate investment license for NRIs, implemented a negative equity facility for real estate purchases, and made interest-free loans available for self-financing real estate transactions. These initiatives have made it easier and more appealing for NRIs to do business in the real estate sector.
Sharing the details on the kind of product categories these NRIs based out of UAE prefer, Mr. Ohri highlighted that, “While the demand cuts across geographies and product categories, a substantial demand has been coming for homes in the luxury segment and above, in projects that offer amenities and facilities at par with global standards. High rises, part of luxury condominiums located in metro cities like Delhi, Gurgaon have always been the preferred choice of NRIs”
Recent reports reveal that NRIs continue to choose Indian metropolises such as Delhi, Gurgaon, Mumbai, and Chennai. Among these, the New Delhi-NCR region is attracting a sizable portion of NRI investment in Indian real estate. Gurgaon, in particular, has become a popular investment destination for NRIs and expats due to its well-developed infrastructure and thriving social fabric.
Indian developers have been seen making the most of this opportunity. Leading Indian developers including DLF, one of India’s largest listed developers have extensively reached out to the NRIs based out of UAE.
According to recent media reports, DLF is gearing up to launch its newest luxury project in Gurgaon, and NRIs based in the UAE have expressed interest in this upcoming project, as the real estate giant is launching a luxury high-rise project in Gurgaon after a couple of years.
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